Indian Oil gets 40% response to staff share sale offer

NEW DELHI: State-run refiner and fuel retailer Indian Oil Corporation has got “unprecedented” response to its employee share sale offer, with workers of the company lapping up more than 53% of the shares on offer, the government said on Wednesday.

“This is the highest-ever employee participation in disinvestment process of any company post OFS,” the government said in a statement. It said nearly 40% of the employees participated in the issue, applying for 53.17% of the 121,39,762 shares on offer.

About 1.21 crore of the company’s employees were eligible for the offer.

“The government is expected to raise Rs 237 crore from the stake sale,” a senior government official said on condition of anonymity.

The OFS window, which closed on May 10, offered 0.5% of the issue size to its employees.

The employees were offered shares at a discounted price of Rs 367.65 a share, a 5% discount to the cut-off price of Rs 387 discovered through IOC’s OFS of equity shares carried out by the government in August 2015.

The official quoted above said higher employee participation will help push issues where employee unions are against any further stake sale in state-run companies.

Earlier this year, trade unions representing almost 90% of the Coal India workers had protested against disinvestment in the coal producer.

“This also underlines the confidence of the employees in their firm and reaffirms their faith in the company’s performance. Investors will definitely take a cue from this development,” the official said.

Last fiscal, the government had raised around Rs 9,379 crore from the sale of 10% of its stake in IOC, a major portion of which was subscribed by state-run insurer Life Insurance Corporation.

The government has budgeted Rs 56,500 from disinvestments proceeds this fiscal, of which Rs 36,000 crore is to come from stake sales.

Last month, minister of state for finance Jayant Sinha had said that the government has identified some central public sector enterprises in sectors such as oil, energy and capital goods for selling its stake in this fiscal.

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The ongoing field development and EOR/IOR projects are expected to produce a cumulative of 54.6 million tonne (mt) of crude oil and 114 billion cubic meter (bcm) of natural gas in the next three to four years, the report said.